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RESPONSE TO APPLICATION

[1t
Please fmd below responses by the Rob Ford Campaign for Mayor of Toronto (the "Campaign") to

allegations in the application for a compliance audit filed by Ted Ho (the "Applicant").

[2.]

The Campaign complied fully with the Municipal Elections Act, 1996 ( "MEA") and denies all

allegations that it breached any provision of the MEA or City of Toronto By-law 1177-2009 ("the

By-law").

[3.]

The Campaign's filings are complete and transparent, in accordance with applicable law. The

documentation filed with the Clerk of the City of Toronto shows that the Campaign complied with

the MEA and the By-law. The Campaign's finances and expenses as of December 31, 2010 have

already been fully audited. 2 Accordingly, the compliance audit requested by the Applicant is not

required, and the application for a compliance audit should be dis ssed.

[4•]

Doug Ford Holdings Inc. ("DFH") was a vendor/supplier to the Campaign, as stated in the

Campaign's filings with respect to expenses. Where goods or services being supplied to the

Campaign by DM were being subcontracted, particulars of the goods or services supplied by

subcontractors have been provided.

1
References, for convenience, are made to the corresponding paragraphs in the application of Max Reed and
Adam Chaleff-Freudenthaler and the response thereto.
2
See Attachment 3.
-2-

The services referred to in the Toronto Congress Centre invoice were delivered by the Toronto

Congress Centre on March 26, 2010, after Rob Ford was a registered candidate. The invoice was

paid, and the services were provided, after the candidate was registered.

[5 .]

DFH was a supplier to the Campaign and subcontracted for certain goods and services supplied to

the Campaign. DFH has been fully paid by the Campaign. However, like other suppliers to the

Campaign, DFH was not paid as of December 31, 2010 but has been paid since December 31, 2010

by the Campaign.

The Campaign paid DFH from the Campaign's account on March 25, 2011. 3 No information as to

when such expenses were actually paid from the Campaign's account has been provided to date

because the filings to date are for the period ending December 31, 2010. This information will be

included in the Campaign's filings for the period ending June 30, 2011, due September 2011. 4

Accordingly, DFH did not pay any of the Campaign's expenses.

[61

The Campaign did not violate s. 69(1)(c) of the MEA. DFH was a vendor of goods and services to

the Campaign. DFH delivered goods and services through its subsidiary, Deco Labels and Tags, or

subcontracted for goods and services from other vendors. In every instance, all goods and services

rendered by DFH have been paid from the Campaign's account.

[7 .]

The Campaign did not violate s. 76(1) of the MEA. The Toronto Congress Centre invoice was for a

reception held by the Campaign on March 26, 2010. The goods and services contracted for were

3
See Attachment 2
4
See Attachment 3
-3-

delivered by the Toronto Congress Centre on March 26 th, not on March 25t h . The Toronto

Congress Centre expense was incurred on March 26t h after the candidate was registered.

[8.]

The Campaign did not violate s. 75(1) of the MEA.

[9. - 14.]

DFH did not provide a loan to the Campaign. DFH was a supplier to the Campaign and was paid

like other suppliers to the Campaign from the Campaign's account.

The interpretation of the wording of the invoice from Davis LLP, on its face, is incorrect. 5 The

invoice refers to reviewing, amending, signing and sending a commitment letter to the TD Bank and

related matters. The word, "loan" in the phrase in the invoice which reads "... issues surrounding

loan to Campaign and guarantee by Doug Ford Holdings Inc." cannot refer to a loan from DFH.

Lenders do not guarantee their own loans.

The Campaign's filings appropriately document the loan received from the TD Bank. There is no

evidence that the Campaign obtained the TD Bank loan in response to the advice received from

Davis LLP.

There was no interest paid to DFH since DFH was a vendor, and not a lender, to the Campaign.

Rather than draw on the TD loan to pay all vendors when the goods and services were delivered, the

Campaign deferred payments until funds became available through the Campaign's fundraising

efforts. Other vendors/suppliers, like DFH, were not paid until some months after the goods and

services were delivered to the Campaign and were paid no interest. It is quite normal during a

s
No solicitor-client privilege is being waived by this response.
-4-

campaign for there to be some vendors who require immediate payments and others who are

prepared to wait.

[15.]

As stated above, all invoices from DFH have been paid in full by the Campaign. DFH was not the

only vendor whose invoices were not paid for some months.

[16.]

DFH was a supplier to the Campaign. Any vendor providing goods and services "directly" may be

required to contract with others to ob a n either the raw materials or services it needs to produce a

product or render a service. There is nothing preventing a supplier from subcontracting for certain

goods and services.

[17.]

As stated above, DFH was not a lender to the Campaign. The invoice refers to the "loan to

Campaign and guarantee from Doug Ford Holdings Inc." and only refers to the TD Bank loan.

Campaigns often do not have the cash flow available to pay for expenses as they are incurred. The

MEA permits a candidate to borrow from a financial institution or to defer payment of expenses.

DFH was not the only vendor whose invoices were not paid on receipt. In any event, all invoices

rendered by DFH have been paid in full by the Campaign.

[18. — 19.]

As stated above, DFH was at all times a vendor, not a lender.

[20. — 21.]

The Campaign did not violate the By-law. The goods and services rendered by DFH were not given
-5-

or donated to the Campaign. DFH rendered invoices to the Campaign for the goods and services

delivered and the invoices have been paid in full by the Campaign.

[22.]

The Campaign has not accepted any corporate contributions.

Conclusion

[34.]

The Campaign has complied with Section 76(1) of the MEA. DFH did not pay the Campaign's

expenses. All Campaign expenses were paid from the Campaign's account. No expenses were

incurred before the candidate was registered.

[35.]

The Campaign has complied with Section 75(1) of the MEA. DFH was a vendor, not a lender, and

was paid for goods or services supplied to the Campaign like other suppliers. DFH did not

contribute to the Campaign, nor did any other corporation.


ATTACHMENT 1
D. Christopher ahno, C.A.
Chartered Accountant & Management Consultant

INDEPENDENT AUDITOR'S REPORT

To Rob Ford, Candidate for Mayor and Ulli S. Watkiss, City Clerk, City of Toronto

I have audited the accompanying financial statements of Rob Ford, which comprise the
Statement of Assets and Liabilities as at December 31, 2010, the Statement of Campaign Period
Income and Expenses for the campaign period then ended, the Statement of Determination of
Surplus or Deficit and Disposition of Surplus, and other explanatory information. The financial
statements have been prepared by the Candidate based on the financial reporting provisions of
the Municipal Elections Act.

Management's Responsibility for the Financial Statements


The Candidate is responsible for the preparation and fair presentation of these financial
statements in accordance with the financial reporting provisions of the Municipal Elections Act
and for such internal control as he determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I
conducted my audit in accordance with Canadian generally accepted auditing standards. Those
standards require that I comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material
misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis
for my qualified audit opinion.

Basis for Qualified Opinion


Due to the inherent nature of the transactions of organizations of this type, the completeness of
the various categories of income and expenses is not susceptible to satisfactory audit verification.
Accordingly, my verification of income and expenses was limited to the amounts recorded in the
records of the Candidate and I was not able to determine whether any adjustments might be
necessary to income, expenses, assets, liabilities and surplus/deficit. As well, the Act does not

1614 Carmen Drive, Mississauga, Ontario L50 3Z1 0 By Appointment Only


Telephone (905) 278.4847 • Facsimile (905) 278-5210
require me to report, nor was it practicable for me to determine, that contributions reported
include only those which may be properly retained in accordance with the provisions of the Act.

Qualified Opinion
In my opinion, except for the possible effects of the matter described in the Basis for Qualified
Opinion paragraph, these financial statements present fairly, in all material respects, the financial
position of Rob Ford as at December 31, 2010, his income and expenses for the campaign period
then ended and the determination of surplus or deficit and the disposition of surplus in
accordance with the financial reporting provisions of the Municipal Elections Act.

Basis of Accounting
Without modifying my opinion, I draw attention to the fact that these financial statements are
prepared to assist the Candidate to meet the requirements of the Municipal Elections Act. As a
result, the financial statements may not be suitable for another purpose.

rt CZA---Er--

Chartered Accountant and Licensed Public Accountant

March 18, 2011


Mississauga, Ontario
ATTACHMENT 2
, jio% C.: ir1 c c Tel

ROBERT:FOHQ,CAMvAIGN
28. qREENspoRp;DRIVE,
'TORprgcliON M-9W I E1
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' :REXDALE COMMERCIAL BANKING:CENTRE


C.:2038 KIPLING'AVE::AT REXDALE BLVD.
'TORONTO, ONTARIO
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ATTACHMENT 3
ROB FORD CAMPAIGN
Expeure.
Msrels 1, 2010 to December 31, 2010

Expenses Expenses not subject to spending lunit


Inventor
Y
contribut Salaries &
cd t o Returned Costs of fund Voting day
Dote Ref Suppliers Amount Bank Interest on Meetings 19ominstio Office Phone end/or hclit'lhoo° Accounting &
Advertising Brochures candidst rants Signs contributi rolling partylsppreel Other
charges loon hosted n filing fee expenses interact audit
en professional OD% function slims notices
compsig fees
n (Scb.
3)

fifer 2610
Mar 25/10 71205 Toronto Stamp 598.70 I 598.70
Mar 25/10 414796 Label Supply 4Dcco 52,173.30 52.173.30
Mar 25/10 LIcco Labels invoked Campaign. scc A/It (52,173.30) (52,173.30)
Mar 25/10 RF-I Doug Ford Holdings 510,1200.00 510,900.00
Mar 26/10 71270 Taranto S=rrip..._ $4136 $41.56
Mar 26/10 T233936/M Sable Polyrncrshapes -Deco 53,492.85 53.492.85
Mar 26/10 Deco Labels invoiced Campaign, see A/li (53,492.85) 153.492.85)
Mar 26/10 0E-2 Doug Ford Holdings 1)73,379.81 525,379.81
Mar 27/10 16143 Doug Ford Floldinos 58.24230 10,242.50
Mar 28/10 108112 Toronto Community_llews 51,311.66 51,3 11.66
Mar 28/10 tr•1V4 Anent= Inc. 5157.50 0157.50
Mar 29/10 190 Momcntumn $5,250.00 55,250.00

Mar 29/10 111379 Deco Labels k Tags 5719.35 5719.35


Mar 31/10 111-5 Doug Ford Holdings 53,000.00 03 000 00
Mar 31/10 111637 Deco Labels &Toes 52,477.72 52.477.72
Mat 31110 111638 Deco Labels &Tags $1,12348 51,123.60
Mar 31/10 111639 Deco Labels &Tags S2,209.15 $2 209.15
Mar 31/10 Bank Bank activities 5347.19 5207.15 5140.04

Total 560,358.82 51,469.16 5207.15 03,197.07 50.00 50,00 50.00 50.04 51,403.98 50.00 58,250.00 52,209.15 50.00 50.00 543,622.31 50,130 50.00

Palte I of 1
R013 FORD CAMPAIGN
Expenses
March 1, 2010 to December 31,2010

Expenses Expenses not oh>coi to spending limit


Invento
r
contribut Salaries dit

Date Rd Sopphers Amount ed to Returned Costs of fond Voting day


Dank Interest on Meetings Nominatin Office Phone and/or bc'clIt'll'on° cenonting&
dvertising Brochures candidat rads Signs contributi raising parly/appreci Other
c harges loan hosied is filing fee expen ses Internet audit
es's professional ons function slim notices
campaig fees
n (Sch.
3)
Apr 2010

Apr 1/10 In-kind 5251.40 251 4


Apr 1/10 RFC - 1 Deco Labels &Tags 51,050.00 $1,050.00
Apr 5/Ill
Apr 7/10
RF-6
141303
Doog Ford Holdings
WOO
$7,000.00
5259.79 5239.79
'MEM
Apr 14/10 10015 Kerri O'Callaghan 54,118.85 54,1111.55
Apr 19/10 22779 Itexdale Printers Limited 51,097.25 51.097.25
Apr 23/l0 6981 The Toronto Congress Centro 5749.41
M
$749.41
Apr 27/I0 112311 Deco Labels &Togs 51,494.31 51.49431
Apr 27/10 22793 Itesslale Printers Limited 5367.50 536730
Apr 30/10 2 Mari:lowboy 55,000.00 55.00000
6yr 30/10 Dank Bank activities 5535.84 553564
$0.00
T tat 521, 24.35 54.118 05 5535.84 11,494.31 50320 50.00 5 .00 10.00 52,76 .15 5259.79 512,000.00 0 50.00 00.00 5 749.41 00320 00.0

Parc 1 at 1
0013 FORD CAMPAIGN
Expenses
March I, 2010 to December 31,2010

Expen r.s Expenses not subject to spending imit


Inventor
r
contribut Salaries &
cd to benefits/hono Returned Costs or fond Voting day
Date Ref Suppliers Amount BSA DI rest a leetings Numinatio Drivee Phone and/a Accountin
drertising Brochures candidai rani, Signs contributi raising party/append Other
charges oan hosted n filing fez expenses Internet audit
m's professional ons function Blinn notices
campaig (ees
n (Sch.
3)
Mo 2010
May I/10 (411 rdcyc TechnoToiics Inc. 512536 5125,96
Mcy 1/10 142 ThinIcyc Technologks Inc, $025.96 5125.96
May 1/10 143 Thirtleye Tcchnologks inc. 131.49 131.49
May I/10 RFC - 2 Deco Labels & Tags $1,050.00 51.050.00
May WO 7001 (May Campaign Research 58,400.00 58,405,00
May3/10 Cleaning Animus LP 11,050.00 5),050.00
May3/10 1st & last Arcuturs LP 13,360.00 13,360,00
Mny 9110 9-May Da Mobility $162.04 1162.04
Mav 111/10 1373 Dirat Communications Mgt $6,302.73 56,302.73
May )1/10 R..F-7 Doug. RJstateltlim_ $323,100.00 $23,100.00
May I I/10 5/11/2010 Rally far Canada Inc. 510,500.00 510,503.05
May 12/10 RFD - 092 Campaign Research $2,016.00 12.016.00
May 14110 I4.May Fraser MacDonald $169.72 1169.72
May 14110 CA10202 Meltwater News 02,205.00 52,2115.00
May 16/10 112010 expn Luke Robertson 5304.65 1394.65
May 17/10 1374 0/Ma COMmunicalions M 0 56,069.11 16,009.11
May 17110 22841 Rexdale Printers Limited 523615 $236.25
May 17/19 112918 Deco Labels &Tags 5675.70 1075.70
May 17/10 112919 Deco Labels & Tags $2,520.70 52,520.711
May 17/10 112920 Deco Labels &Tags 51,28415 $1,264.25
May 17/10 112921 Deco Labels &Tags 5372.90 72.90
May 17/10 002-2010 Campaign Research 51,41730 SI 4 7.50
May 21/10 1375 Direct Commonatioas Mgt 56,199.62 16,199.52
Stay 21/10 May 10-14 Mitch Wexler 5481200 0460.00
?day 21/10 hlay 4-14 Kia Ndatiart 1900.90 1900.00
May 21/10 May4-14 Luke Robensoa 51080.00 51,080.00
May 21/10 to May 29 Paige MacPherson 5639.00 1030.00
May 22110 91705 Milan Studios sislas 113 .
May 23/10 113031 Deco Labels &Tags 562215 5622.35
Mao 20/10 1376 Direct Communications Mgt 55,85911 $5,059.2)
May 29/10 12592 Markle Camera & Video 52,15330 12 153 90
May 3I/10 29.9l07 Tont Barr 53,250.00 53,250.00
May 31/10 3 I-Mav Kia Ndatian 555.49 555.49
May 31110 C.. wases Liz Gawur 517335 5173.35
51ay31/10 3-Jan Mask Tawny $4,900.00 $4,000.00
May31/10 Hank Oncrk activities 5502.65 1502.65
50.00
5372 0 5502 65 S5,10 .00 I 50. 5 .00 524,4 0.67 50.90 I S19,1389.61 I $12,362.9 $43 56.00 50.00 50.00 50.00 50.00 10.00 59.
Total $97,517.78

Pane 1 or I
ROB FORD CAMPAIGN
Exp VIKA
March 1,2010 to December 31,2010

Escerrces Ex corm no subject to spending limit


Inventor
r
contribut Salaries &
ed to Returned , Costs of fund Voting day
Date Ref Suppliers Amount Bank Interest on 51ectings Norninatio Office Phone and/or beoefilillmo
d -rt Brochures candidat rania 31 2as contributi -ccountin raising partylappreei Other
charges loan hosted n filing fee upensm internet audit
ces professional ant function ation notices
campaig f,,,,,
a (Sch.
3)
Am 2010
Jun 1/10 12002 Future Link Comrnunicatin;; $630.00 £030.00
Jun 2110 Jun 5 Liquor license (Dacus event) 375.00 575 00
Jun 1110 rent for the Deco Labels &Tags $1,050.00 51050.00
Jun 1/10 RFC -1103 Campaign Research 58,400.00 50,400.00
Jun 3/10 A11100605.4 Grnnd Baccus $20,106.29 520 06.29
Jun 3/10 May 17-30 Ria Negatian 31,000.00 51,000.00
Jun4/10 1381 Direct Communications Mgt 56,10120 56,201.20
Jun4/10 /05360090 1 &./ Manufacturing 51,750.99 $1.750.99
Jun4/10 May17-30 Luke Robertson 51,100.00 $1,200.00
Jim 4/111 May 17-30 Mitch Wexler 51,320.00 51,32000
Jun 4/10 May 19-30 Paige Macpherson $681.00 =II 5802.00
Jun5/10 60510 Digital Dream Produciions Inc. 56,615.00 56.615.00
Jun 7/10 13211 Campaign Research 51,695.00 $1,095.00
Jun 7/10 113426 Dc co I_ouch & Tags $.591.18 5591.18
Jun 8/11/ 1121 3D Contact Inc. 591.61 $91.61
Jun 8110 13475 Deco Labels & Tags 5681.84 5681.84
Jun 14/10 1382 Direct Communicatiom Mot 56,397_86 56.397.86
Jun 14110 (13673 Deco Labels &Tags 5441.94 5442.94
lun 17/10 10110 Kerri 0,Colla0l 54,331.86 54,331,86
Jun 18110 41 Kia Negarian 51,200.00 5120000
Jun 18/10 42 Luke Robertson 51,200.00 51,200.00
Ion 19/1 0 43 Mitch Wexler 51,200.00 51.200.00
Jun 18/10 44 Paige Macpherson 5918.75 £910.75
Jun 18/10 45 Stephanie Gattur 51,100.00 51,700.00
Jun 10/10 46 Emma Verity 5600.00 5600,00
Jun 18/10 47 Fraser MacDonald $600,00 5600.00
Jun (8/11) 48 Liz Gaivur 5547.58 5547.58
Jun 21110 50 Sarah (lull 5412.00 5412.00
Jun 21/10 51 for Scarborough office rent 51,000.00 53,000 GO
Jun 21/10 001-2010 Campaign Research 510,521.00 $10,521,00
Jun 23/10 100-067910 liberty Grand Entertainment 517,721.25 $27,721.25
Jun 30/10 57 Kis Negation 559,38 559.38
J n30/10 59 Luke Robertson 519.38 519.38
Jun30/1(1 59 Kia Negatian 51,200.00 51,200.09
Jun 30/10 66 Sarah Hull 51,366.00 $1,700.00

Jun 30/10 Jun-10 Campaign Research $98,400.00 $8,400,00


Jun WI 0 69 Amin Nieman& 5517.93 $17.03 5500.00
Jun30/10 Bank Bank activities 5722.94 5722.94

Total 5124 68.98 55,365.98 5722.94 1681.84 50.00 10.00 512,599 06 5000 50,209.27 572 . 1 539,741.15 $1,7 .99 £9.00 50.00 056,895,54 50.00 50.00
ROB FORD CAMPAIGN
Accounts Payable
December 31, 2010

Date Invoice No. Supplier Particulars Amount Chqii Date

Mar 25/10 RF-1 Doug Ford Holdings Inc. Stephen Spading fund raising fee $10,000.00 542 Mar 25/11
Mar 26/10 RF-2 Doug Ford Holdings Inc. Toronto Congress Centre (campign kick-off) $25,379.81 542 Mar 25/11
Mar 27/10 RF-3 Doug Ford Holdings Inc. Digital Dreams Production Inc. (campaign kick-off) $8,242.50 542 Mar 25/11
Mar 31/10 RF-5 Doug Ford Holdings Mark Towhey (Mar/10) $3,000.00 542 Mar 25/11
Apr 5/10 RF-6 Doug Ford Holdings Tom I3eyer (social media consulting) $7,000.00 542 Mar 25/11
May 11/10 RF-7 Doug Ford Holdings Praxicux polls $23,100.00 542 Mar 25/11
Oct 25/10 ooking: 2477 Toronto Congress Centre Election Night $74,339.31 537 Mar 14/11
Nov 7/10 ,oice end Oct Campaign Research Professional fees $22,611.30 516 Feb 18/11
Dec 31/10 C105 The Albany Club Sep 23/10 fundraiser $977.82 519 Jan 10/11
Dec 31/10 166 Thirdeye Technologies Inc Website hosting $271.11 520 Jan 10/1 l
Dec 31/10 583770 Dec S Bell Mobility Internet $66.60 521 Jan 7/11
Dec 31/10 rl's Dec. cell Roman Gawur Telephone $118.01 522 Jan 17111

Mar 25/10 2010-0256 Rob Ford Nomination fee $200.00 544 Mar 25/11
Mar 11/11 2010 Chris Climo Audit fee $10,452.50 539 Apr 4/11
Dee 6/10 18000-81119 City of Toronto Sign rmoval charges $13,529.28
Jun 3/10 Amex Doug Ford FIoldings Inc. Grand Baccus Event deposit $1,000.00 542 Mar 25/11